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KURIAN M J : 08PG0124 PRAVEEN MOSES P : 08PG0132 VENU GOPAL V : 08PG0146 Logistics Management

Logistics Tqm

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Total Quality Management (TQM) in service industry... logistic management.....

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Page 1: Logistics Tqm

KURIAN M J : 08PG0124PRAVEEN MOSES P : 08PG0132VENU GOPAL V : 08PG0146

Logistics Management

Page 2: Logistics Tqm

Logistics

“Logistics is the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, in-process inventory, finished goods and related information from the point of origin to point of consumption for the purpose of conforming to customer requirements.”

i.e. Moving Right People & Right Equipment to the Right Place at the Right Time through the Right Methods.

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Logistics Cycle

Warehousing

Warehousing

Transportation

Transportation

Vendors/plants/portsTransportation

Factory

Transportation Customers

Informationflows

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Why Logistics Management?

• In the past, Distribution was not important. Because of manufacturers’ monopolyE.g. 10 years waiting for Padmini Cars. 6 years waiting for Bajaj Scooters

• Shift from ‘Sellers’ Market to ‘Buyers’ Market• Consumers are now Bosses

• To have competitive edge over others it is necessary to manage logistics well.

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Why Logistics Management?

• Business has become more Complex & Dynamic now

• Vibrant market (Market is time & price sensitive)

• Rivals not only copy, they add more features & give more value for your money

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So why Logistics Management?

• Complicated business scenario

• Rapid economic boom

• Globalization, Liberalization

• Intelligent consumers

• Quick delivery & after sales service (24 hrs)

Hence the need of Logistics Management.

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Nature & Concept of Logistics Management

• Logistics from Greek word ‘Logisticos’ meaning “science of computing and calculating”

• First used in military sense (Logistical Support)(World War II & other wars)

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Strategic Logistic Management includes 4 steps

1. Corporate vision & objectives – To turn it into winning edges over others

2. Strategic logistics analysis (i.e. finding alternatives, evaluation, selection etc.)

3. Logistics planning & evaluation

4. Managing change

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Various Decisions in Logistics Management

• Plant Location

• Choice of sources/ markets

• Production structure & planning

• Distribution/ Dealer network design

• Warehouse location/ operations

• Plant layout

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Various Decisions in Logistics Management

• Inventory management/ stock levels

• Transportation models/ Routing/ CapacityE.g. Cement Transportation (wagon

shortage) change in packaging (Jute, plastic)

• Packaging • Material Handling

• Storage problems in monsoons

• Nearness of dealers to factory/ warehouses

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Various Agencies Involved • Shippers

• Suppliers– Carriers (Rail, Road, Air etc)– Warehouse providers/ Freight forwarders– Terminal operators (port, stevedores)

• Government (Regulations & logistics)– Role CST, local sales tax, excise, octroi, road tax

on vehicles

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Other Factors • Inbound Logistics (Raw Materials)

• Outbound Logistics (Finished Products)

• Single v/s Multiple plants

• Nature of the productse.g. various dimensions

- Bulk, perishable, non-perishable, refrigerated, non-durable, industrial v/s consumer products, packaged products (Fruits/ Vegetable exports)

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Logistics Department In Bosch

Contact person:Gautham Nayak,Project Manager, Bosch.

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Company•Robert Bosch Engineering and Business Solutions Limited is a 100% owned subsidiary of Robert Bosch GmbH.

•Provide engineering, IT and business services for the automotive, industrial, consumer goods and building technology divisions of the Bosch group worldwide.

•ISO 9001:2000 certified and appraised at CMMI Level 5. (Capability Maturity Model Integration)

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CompanyCore Business:

• Automotive technology• Industrial technology• Consumer goods and power tools• Security Systems

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CompanyBosch has invented the following:

•Anti-lock braking system (ABS)•Traction control systems (TCS)•Electronic Stability Programme (ESP)

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LogisticsBangalore Production Center is the Hub,

which caters to the demand of power tools.• Exercise Warehouse • Other Warehouse The entire system is controlled by a ERP software.

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Logistics interface with Marketing• First, to analyze ‘customer needs’ and then

design' services’.

• Then, design a suitable logistics system.

• Less inventory but faster mode of transport for reaching the goods.

• ‘Customer Servicing’ through ‘better & faster’ logistics.

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Logistics interface with Production• Inventory tied up is money tied up.

• To produce the right product.

• Production schedule through better planning management.

• Production to be market oriented.

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Logistics interface with Production• Procurement of raw materials requires

planning, lead time, mode of transportation, time, cost.

• Co-ordination between production and other departmentsi.e. ‘Logistics’ the whole concept

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Models in Logistics ManagementThese are ‘Quantitative’ models from operations research

1. Forecasting Models– Demand and Supply based on past data

2. Mathematical Programme Modela) Location Model

• i.e. planning optimal & ideal location of plant & warehouses, both for inbound and outbound

• To minimize Transportation cost

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Models in Logistics Managementb) Allocation Models• i.e. optimal allocation of commodities from ‘sources’

to destinations with a vast & multidimensional networke.g. a company with 3 plants & 15 warehouses

c) Distribution Network Design Model• Involves location of warehouses & break bulk points,

choice of transportation modes• Distribution costs include transportation, ware

housing, handling, inventory

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Models in Logistics Management3. Inventory Models– Costs on buffer stock keeping for uncertainties– Shipment & inventories of Finished products, its

warehousing & retailing– Pipeline inventory

4. Routing Models– i.e. routing of transportation network to destinations– The simplest model is called the shortest path problem

e.g. Critical path method in Operations Research– done by using geographical maps

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Inventory Management Decisions• JIT (Just In Time) is a Japanese philosophy

(initiated recently)i.e. nothing is produced/ moved until the need arises

• Produces against advance firm order (Pull)

• ‘Push’ is in anticipation of the demand

• In pull, product flow is based on demand

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Inventory Management DecisionsROP (Reorder point)

• At ROP, the new order is placed

• The quantity to be ordered is based on EOQEOQ = (2AS)

√ i A = Annual usage S = Set up ordering cost i = Inventory carrying cost

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Reliance Retail LtdContact personTom AntonyAsst Manager, RRLCochin, Kerala

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RRL organization structureG.M

D.G.M(Kerala)

Zonal

manager

1

Zonal

manager

2

Zonal

Manager

3

D.G.M(Karnataka) D.G.M(T.N)

Zone 1 Zone 2

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How the Logistics department works???

• Kerala divided into 8 zones• Central warehouse in Trichur ( centre of Kerala

geographically)• The whole logistics department is centralized

with ERP software – S.A.P.

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• Quantity level at each zonal warehouse inspected and reported to the central warehouse everyday

• If minimum quantity is reached, S.A.P. triggers automatically, intent which goes to Distribution centre (D.C.)

• Intent contains details like site code, article code, quantity needed etc, which are generated by S.A.P. automatically

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• A chart will be generated by S.A.P. and given to drivers of distribution fleet which will contain route information, item code, quantity etc to be delivered to different stores across Kerala

• The goods will be taken from Central warehouse to distribution centre, and from there to stores.

• Tools used by S.A.P. – graph theory, travelling salesman algorithm etc

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